SBM #1 - Corner Alliance at $4m

Welcome.

We exist to tell insightful stories about small business owners who found themselves in growth black holes and, through whatever means necessary, climbed out of them. 

I’m not going to waste your time. This isn’t going to be some drawn-out, seven-part email that you’ll have to slog through for the next ten minutes. We’re simply going to tell a story, get to the point, and then get the hell out of here. We’ve got things to do, and so have you, so let’s do this.

Each email will start with three bullets to set the scene:

• Business - here we will name and link the business so you can check it out. Some editions will be anonymous, in this case, we will just share the business type and industry.

• Revenue Black Hole - this is the revenue level where the business was stuck. We typically see this happen every time a business roughly doubles or triples: $500k-$1m, $3m-$5m, $10mm…).

• Learning - the one big learning you can take away from this email in order to decrease the chance you will get stuck in the same Black Hole.

📓 The Overview

• Business: Corner Alliance

• Revenue Black Hole: $4m

• Learning: “If you don’t change, don’t expect your business to”

📓 The Story

In 2007, I started Corner Alliance – a government consulting firm – with a partner, but 6 years later, in 2014, we were firmly working in the business, not on it. We had made some hires and had one back office person, but we weren’t running a business.

I didn’t even know how to get into our bank account.

I was 90% billable. There were no projections or planning.

We hit $4m in revenue that year. $600k profit. But that cash was like a waiter in a New York restaurant, you know they’re there but you can’t get your hands on them.

“Where is the cash?” I asked.

A week later we met with our first good back office hire who actually did revenue projections, and we were told we were about to start losing money as some work was ramping down.

I started not sleeping well. I panicked. We started using our line of credit to cover expenses. We were racking up debt. I mean, I had an MBA but I had no idea how to run a business. They teach you how to be a mid-level finance manager, not run a small business.

So I had to learn about how to run a small business.

I first found two key resources:

• Profit First by Mike Michalowicz

• Simple Numbers by Greg Crabtree

This started a journey where I realized we needed to professionalize the business. Small business ownership requires you to change.

I went from being a consultant who happened to employ myself, into a business owner who owns a management consulting firm.

If you don’t change, don’t expect your business to.

🧑‍🎓 The Lessons: 

1. You need to work on the business, not in it if you want to grow

2. You will need to professionalize your small business to reach $10m

3. Don’t just sit and wait for change to happen, you need to make it happen yourself! If you don’t change, don’t expect your business to

📅 Next Week:

We told you, this was going to be short and sweet!

But this story doesn’t end here. Next week we’ll discuss how everything changed once I bought my partner out; how the operations and leadership structure had been altered; and how we overcame all obstacles to get to the next phase of our business.

Intrigued? Stick around for next week and we’ll be back in your inbox 😎

Keep growing,

Alan